Prestige Asks Agents to Stop Discounting

Details

April 25, 2012

Prestige Cruise Holdings is clamping down on agents rebating cruises for Oceania and Regent Seven Seas. In a letter to agents, obtained by Cruise Industry News, Prestige stated that rebating creates confusion in the marketplace, resulting in lower margins for agents and leads to a wide range of prices and value-adds being offered for the same stateroom.

Prestige said it would instead like to see agents focus on articulating the brand and value proposition of their lines instead of discounting.

The company made the point that an upscale cruise product is sold, not bought. The value proposition needs to be understood, not discounted. It said its success depends on agents being able to explain the brands’ point of distinction, to match clients with the right product, to close sales, and to continue service customers.

Effective May 1, Prestige’s new policy is agents are not allowed to advertise or promote prices less than what the cruise lines are offering. Other requirements are for gross amounts for final payments and advertised amenities cannot exceed 5 percent of the value of the cruise fare.

If a reservation is transferred to a second within 30 days the receiving agency will receive a 10 percent commission. If a reservation is transferred more than 30 days after booking, a 10 percent commission will be paid to first agent and no commission to the second agent.

If the policy is violated, Prestige reserves the right to reduce commissions, marketing funds, cancel or deny group contracts or take any actions it deems appropriate.

Prestige’a new policy, however, comes at a time when many of the cruise lines, including Oceania and Regent, have created an environment of discounting with drastically reduced brochure fares, special offers and add-ons.